Chapter 13, Problem 3Q

To determine

First-in First-Out method (FIFO)

In First-in-First-Out method, the cost of initial purchased items is sold first. The ending inventory values are those items that include recent purchased items.

Average Cost Method

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale.

Formula

$\text{Weighted-average Cost}=\frac{\text{Total Cost of Goods Available For Sale}}{\text{Total number of units Available for Sale}}$

To report

The change incurred due to change of inventory method.